Why education should be for profit

Michael Gove’s free schools programme has been heralded as the cutting edge of the coalition’s structural reform programme. Removing the dead hand of the state and allowing new schools to emerge makes the Big Society project tangible at least. But already – and unsurprisingly – the reforms are running into difficulty.

By the end of the summer, only 62 schools had applied for “free school” status. They will all be run on a not-for-profit basis. Perhaps, just perhaps, this is the start of a cascade. But it’s doubtful. If you want real innovation and improvement in the educational sector, people need to be able to make money out of it. That would surely bring about a flood of exciting, new entrants to the market.

Read the rest of the article on the Spectator Coffee House blog.

Director General, IEA

Mark Littlewood is Director General of the Institute of Economic Affairs and the IEA’s Ralph Harris Fellow. Mark has overseen significant growth in the IEA’s size, influence and media profile during his tenure, since 2009. Mark also sits on the Board of Big Brother Watch, a non-profit organisation fighting for the protection of privacy and civil liberties in the UK. Mark is recognised as a powerful, engaging and articulate spokesman for free markets. He is a much sought-after speaker at a range of events including university debates, industry conferences and public policy events. He also features as a regular guest on flagship political programmes such as BBC Question Time, Newsnight, Sky News and the Today Programme. He writes a regular column for The Times and features in many other print and broadcast media such as The Telegraph, City AM and Any Questions.

4 thoughts on “Why education should be for profit”

  1. Posted 16/12/2010 at 00:11 | Permalink

    I agree that competition should be introduced into the school system. Competition almost always produces better results and more innovation. However, survey after survey has found that money is NOT the motivating force for most employees. With this in mind, why do you think it necessary to make free schools for profit. I have heard the argument that food is organised by for profit companies as is the drug industry, therefore why not education. After the financial crisis, where some of the most intelligent and well educated people on Earth engaged in systematic fraud and malfeasance in the search for ever greater profits, I think competition without the profit motive is the way forward.

  2. Posted 16/12/2010 at 10:04 | Permalink

    Many years ago, when ‘profiteering’ was being used as a dirty word, I tried to get the word ‘losseering’ used as an even dirtier word. (It was highly relevant to the activities of the nationalised industries.)

    Needless to say, I had zero success. I believe there probably are still people in this country who actually think a ‘profit’ is a worse thing than a ‘loss’.

    Why a voluntary market exchange which is expected to benefit both parties to the deal should be thought reprehensible is a bit of a mystery. I suspect it may be a touch of the Douglas Jay syndrome — mentally regarding every adult as if they were — to quote — ‘a child of four’.

    Free marketeers have a mountain to climb!

  3. Posted 16/12/2010 at 13:23 | Permalink


    >>why do you think it necessary
    >>to make free schools for profit
    Nobody is saying that a well-run school driven by philantropy, religious belief or parental enthusiasm, should somehow be forced to become for-profit. The article above only says that if somebody wants to run a school with the aim of making a profit, they should be free to do so. Even if the money ultimately comes from the taxpayer, channelled through parents.
    Let’s put it the other way round: If you’re so sure that profit-making and education are mutually exclusive, then why are you so afraid that you want to see for-profit schools banned? Surely, if you’re right, for-profit schools will not be viable anyway.

  4. Posted 16/12/2010 at 14:06 | Permalink


    there are for-profit schools in the private sector today in the UK and there used to be a lot more of such schools. They were mainly owned and run by families and many had to close, I believe, because of Inheritance Tax provisions. Most people do not know they exist so I cannot believe that they are all run by people like Bernie Madoff. The fact is that different corporate forms are appropriate in different circumstances (a proprietary model being especially appropriate when capital is short). Our fear is that, if capital is short in ths sector after this reform, it will be a damp squib.

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